Orient Securities·2024-03-25 16:00Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 27.24 HKD based on a 19x PE valuation for 2024 [2][4][6]. Core Insights - The company reported 2023 revenue of 27.6 billion, a year-on-year increase of 7%, while net profit attributable to shareholders was 3.19 billion, down 21.6% year-on-year, influenced by a one-time gain from land disposal of 140 million [1][6]. - The company faced revenue growth pressure in the second half of 2023, with revenue and net profit attributable to shareholders growing by 1.4% and declining by 43.1% year-on-year, respectively [1]. - Inventory levels have returned to a healthy state, with a channel inventory turnover of 3.6 months by the end of 2023, showing significant improvement from the previous quarter [1]. - The company is focusing on professional categories, with retail sales increasing by 12% year-on-year, particularly in running and fitness categories, which grew by 40% and 25% respectively [1]. - The company has a cautious outlook for 2024, predicting mid-single-digit revenue growth and low double-digit net profit margin, while remaining optimistic about long-term growth potential due to brand value and product breakthroughs [1][2]. Financial Summary - The company’s projected earnings per share for 2023-2025 are 1.23, 1.32, and 1.52 RMB, respectively, with a downward adjustment from previous estimates [2][6]. - The revenue forecast for 2023-2025 is 27.6 billion, 29.1 billion, and 32.1 billion RMB, reflecting a growth rate of 7.0%, 5.4%, and 10.2% respectively [3][9]. - The gross margin is expected to remain stable at around 48.4% for 2023, with a slight decline projected for the following years [3][9].